February 18, 2014 / 11:00 PM / in 4 years

Colgate warns of loss from Venezuelan currency devaluation

Feb 18 (Reuters) - Colgate-Palmolive Co, the world’s largest toothpaste maker, said it expected a one-time loss of $180 million to $200 million in the current quarter after Venezuela devalued its foreign exchange rate.

Colgate said it expected a one-time loss of 19 to 21 cents per share if Sicad (Supplementary System For The Administration Of Foreign Currency) rate remains at 11.70 in the first quarter.

Venezuela’s central bank devalued the Sicad, one of two rates in the country’s currency control system, by 3 percent to 11.7 bolivars per dollar on Saturday.

Procter & Gamble Co, the world’s largest household products maker, last week cut its sales and earnings forecast for the year to reflect unfavorable foreign exchange rates in Venezuela and in various developing markets.

Colgate said on Tuesday it expected earnings to be reduced by 3-4 cents per share in the first quarter.

Chief Executive Ian Cook said last month foreign exchange fluctuations are expected to hurt sales by 3 percent and profit by 4-5 percent in 2014.

The company, which receives about 4 percent of its net revenue from Venezuela, had warned that the devaluation of the Venezuelan currency would result in a one-time loss of $120 million for the first quarter of 2013.

Through its subsidiary in Venezuela, the Company is invested in U.S. dollar-linked, devaluation-protected bonds and fixed interest rate bonds.

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